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Accountable Care Organizations
Rick Shinto, MDAveta Health Inc.
July 20, 2010
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Health Care Reform- New Models of Care
Patient Protection and Affordable care Act (PPACA 2010)
controlling costs and improving qualitySeveral payment reform pilots
Growth of new models of CareMedical HomesPatient-Centered Medical HomeAccountable Care Organizations
NCQA and the Medical Home
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Why Accountable Care Organizations?
ACOs are one response to concerns over the fragmented nature of health care delivery in the USCurrent payment system inefficient
Fee-For-Service (FFS)Volume- based structureIncentives lacking in FFS payment systems
They aim to create incentive for providers to work together more closely by tying at least part of their payments to metrics reflecting care the ACOs as a whole provides for defined groups of peopleExpected estimate of 5$ billion savings
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What is an ACO?
What constitutes an ACO?Definitive regulations to be rolled out in early 2011
Accountable care organizations are a method of integrating localphysicians with other members of the health care system and rewarding them for their comprehensive coordinated quality efforts
They are accountable for 100% of expenditures and care of a defined population of patientsShared saving program (based on benchmarks)Continuum of care- full coordinationPromotion of qualityEfficient service delivery
Takes into effect 2012Pilot Programs
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Who Can be an ACO?
Academic Medical CentersHMSOs- Hospital Medical Staff OrganizationHPPNs- Health Plans and ProvidersDifferent Physician Models:
Integrated Health SystemMultispecialty GroupsPHOsIPAs
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ACO Model 1 ACO Model 2 ACO Model 3 ACO Model 4
Possible ACO Configurations, Comprised of Different Provider Organizations in Local and
Regional Geographic Areas
Independent Practice Association (IPA)
OrPrimary Care
Physician Groups
Specialty Groups
Hospital Hospital
MultispecialtyGroup
OrganizedDelivery System
HospitalEmployed and
Affiliated Physicians
Possibility OtherProviders, like
Post-Acute Care
Hospital MedicalStaff Organization
(MSO)Physician-HospitalOrganization (PHO)
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Requirements of an ACO
Willing to become accountable for quality, cost, and overall careMinimum 3 year contract agreementFormal legal structure (allow to receive and distribute payments for shared savings)PCPs= minimum of 5,000 membersHave a leadership management structure that includes clinical and administrative systemsPractice evidence-based medicineReport on quality and cost measuresPatient centerednessIT structureHave PCPs, specialists and probably hospitalDifferent payment model- accept risk
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Accountable Care System Models and Core Capabilities
Accountable Care System Models
Redesign Care Process
Teamwork Care Coordination
Core capabilities Performance Accountability
Information technology
Knowledge Management
Change Management
1. Multi-Specialty Group Practice (MSGP)
High High High High High High Medium
2. Hospital Medical Staff Organization (PHO)
Medium Medium High High High Low to Medium
Low to Medium
3. Physician Hospital Organization (IPO)
Medium Medium Medium High High Medium Medium
4. Interdependent Provider Organization (IPO)
Low Low Low to Medium
Medium Low Low Low
5. Health Plan Provider Organization/Network (HPPO/HPPN)
Medium Low to Medium
Low to Medium
Medium to High
Low to Medium
Low to Medium
Low to Medium
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Managing Risk
To manage risk the following are requiredInformation systemsMedical management protocols and proceduresContracting with health plans, employers, etcCollection and distribution of dollarsCompliance with state and federalCapital pool
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continued
Recommendations3 tier structure of qualification for ACO integrationBased on degree of financial risk assumed by ACODegree of rewards
Level 1: FFS payment with shared savingsLevel 2: bundled payments ( i.e. AMI, CABG, total knee) and episode of care payments (i.e. asthma, diabetes)Level 3: partial ( for professional and risk shared for hospital care) and global capitation payments
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Alternative Methods of Payment
Fee for FFS+ Episode Partial Comprehensive CapitationService Shared Payment Comp. Care (Global)
Savings Care Pmt. Payment+ P4P
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ACO Pilot Programs
Mayo ClinicGeisingerIntermountain HealthcareModel testing
Dartmouth/Brookings ModelCarillion Clinic (VA)Norton Healthcare System (KY)Tucson Medical Ctr (AZ)
MassachusettsSpecial commissionCapitated payments in ACOAssume riskPt preferences/ considerations
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Continued
VermontBlueprint for health reformEnhanced medical home (Dartmouth Model)
ColoradoMedicaid considerationNew pilot60,000 members--- Start winter 2010
Academic HospitalsBaylor System
• 4500 providers and 13 hospitals• Marketing to employers• Bundled payment systems
Robert Wood Johnson Foundation• Partnership with Medical School• 100-150 providers• Linked to 6 hospitals• Bonus not determined
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Seven core ACO competencies and associated critical success factors
Core competency
Critical success factors
Leadership Ability to develop strong teams and shared cultureAbility to mediate stakeholder priorities Ability to clearly, regularly and consistently communicate vision,strategy and direction to internal and external stakeholdersAbility to change direction when necessaryAbility to innovate
Governance Ability to design and execute strategy and management performance goalsAbility to leverage cultural strengths and neutralize culturalchallenges Ability to access and deploy capital efficiently to implement strategy
Ability to recruit and retain competent leadershipAbility to use fact-based planning to engage trusteesAbility to leverage profit with purpose
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Operational management
Ability to incorporate clinical performance measurements (safety, efficacy, effectiveness, costs, outcomes, satisfaction, productivity, efficiency) to optimize accountability and gain sharing Ability to contract effectively with health plans and employers to leverage capabilities and performance Ability to align supply chain vendors in collective gain sharing and achieve optimal purchasing efficiencyAbility to manage regulatory compliance
Clinical management
Ability to manage clinical pathway adherence by care teamsAbility to redesign and align population-based health management processes with evidence-based guidelinesAbility to coordinate care across patient conditions, services, and settings over timeAbility to manage patient behavior and implement patient outreach, adherence and self care
Continued
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Infrastructure and IT
Ability to build and make effective use of information technologies for health care delivery and administration at provider, patient and system levelAbility to integrate systems and aggregate data across multiple sites ofcare Ability to synthesize data into dashboards for management decision-making Ability to leverage IT infrastructure to reduce paperwork and workflow inefficiency
Risk assessment
Ability identify and mitigate the impact of at-risk populations of patientsAbility to identify and interdict operational problems that pose risk
Work force Ability to effectively design and allocate a health care workforce Ability to optimize workforce productivity in team-based incentive structure Ability to control fixed and variable costs for workforce through innovationin HR designAbility to manage outsourced relationships and strategic partnerships to cost-effectively enhance core competencies
Continued
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Current Federal Considerations
Patients assigned to ACO based on their PCPCan be voluntary participation (vs. mandatory)
Open accessCan see providers outside ACOCan switch ACOPCPs can belong to only one ACOSpecialists can participate in more than one ACOBonuses based on cost benchmarks by set by HHSCurrently only Medicare- commercial insurers seriously being consideredSet waiversMultiple hospital regional area- competition?
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ACO- Legal ConsiderationsRelevant Laws Principal Legal Objectives Potential Design Implications
Antitrust Avoid market monopolization Remain within precedent “safety zones” in terms of number of physicians involved
Utilize non-exclusive physician agreements
Civil Monetary Penalty Provisions of Social Security Act
Do not induce physicians to reduce or limit care provided to Medicare/Medicaid beneficiaries
Focus cost-savings on compliance with principled guidelines (e.g., substituting lower-cost, clinically equivalent drugs and devices)
Build in (and document) monitoring systems for care quality andchanges in physician practice patterns (case mix, volume, steerage, etc.)
Do not reward physicians for referrals
Ensure complete disconnect between amount and timing of compensation and referrals
Pre-determine any bonus amounts: avoid letting bonus amount fluctuate in a way that could be connected to physician referrals
Preserve payment-productivity parity
Reimburse any non-clinical work at fair market value
Stark and Anti-Kickback
Keep payment within fair market value “safe range“
Compare overall opportunity (base plus bonus) with third-party-verified regional benchmarks
Keep compensation within two standard deviations of industry-wide metrics
Not-for Profit Tax Exemption
Do not share hospital profit with individuals
Predetermine payout and bonus amountsTie bonus payout to specific performance milestones
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What the FTC is looking for
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Elements of Clinical Integration
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Clinical Integration Requirements
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Difference between Medical Homes and ACOs
The terms are often used synonymously but they are not the same.Practices within ACOs would/could function as medical homes
ACOs are integrated delivery systems that are globally capitatedto control the cost and quality of care for a population of patients. MedPAC says: “This concept could complement medical homes, which in some cases may be too small to support full accountability, and hospital-physician bundling, which creates no incentive to control the volume of initial admissions.”
Medical homes:Much smaller than ACOsSmaller= not capable of robust measures of outcomes or of being held accountable for full costs of careNo incentive to decrease volume of own or other servicesNo incentive for hospitals or specialists to cooperate
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How Does This Work?Steps for initial ACO Implementation
Local providers and payers agree to pilot ACO reformAssessment of participants ability to form a viable ACOACO providers list of participating providers to payersPatients are “assigned” to ACOs (e.g., based on preponderance of E&M codes)Actuarial projections about future spending are based on last 3 years of historical dataDetermine/negotiate spending benchmark and shared savings arrangementACO implements capacity, process, and delivery system improvement strategiesProgress reports on cost and quality are developed for ACO beneficiariesAt year end, total and per capita spending are measured for all patientsSavings under the benchmark is shared between providers and payers
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